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TMI Blog2019 (12) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellate authority is not precluded from adjudicating the additional claims of an assessee regardless of whether the return was revised or not. The Revenue is under duty to assess the true profits of an assessee and cannot take advantage of the ignorance of the assessee on the provisions of the Act. Thus, the action of the CIT(A) to this extent requires to be set aside and additional claim of the assessee requires to be entertained. However, in the same vain, we notice that the quantification aspects of additional claim flowing from notional set off / carry forward of losses of earlier years from eligible profits has not been examined by the authorities below. We set aside the issue to the file of the AO for the limited purposes of determination of correct quantum of deduction to be computed without setting off any notional losses of the windmill power project pertaining to the earlier assessment years as discussed hereinabove. AO shall allow enhanced deduction u/s 80IA(4) as eligible to assessee in accordance with law regardless of claim made by the assessee in this regard in its return of income. Substantial ground of appeal is allowed for statistical purpose. - ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its own case. It was also contended that from the Asstt.Year 2009-10, the ld.CIT(A) has already allowed this type of computation. However, it was contended that the assessee has misconstrued and misinterpreted the provisions of law, while putting claim before the AO in the return of income. Therefore, it has revised its computation and claimed the deduction of ₹ 6,84,59,347/-. The assessee has filed the following submissions before the ld.CIT(A): 1) In this regard we are submitting herewith the copy of the order of the Hon ble ITAT-Ahmedabad, in the case ACIT Vs. .Harsha Engineers Ltd (ITA No. 2295/Ahd/2011 1759/Ahd/2012) as Annexure 5 where in para 19 of the order the Hon ble ITAT has held has under:- Substituted sub-section (2) of section 80IA,provides that an option is given to the assessee for claiming any 10 consecutive assessment year out of 15 years beginning from the year in which the undertaking or the enterprise develops and begin to operate. The 15 years is the outer limit within which the assessee can choose the period of claiming the deduction. Sub-section (5) is a non-obstante clause which deals with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business is the only source of income and then only deduction under section 80IA can be determined. This is the true import of section 80IA(5). 2) Till date the appellant company has been computing the profit eligible for deduction u/s 80IA(4)(iv) of the Act, after setting off notionally brought forward., loss and depreciation pertaining to each windmill and accordingly in case of other windmill even when there was net profit during the relevant assessment year the same was not claimed as after considering the brought forward loss since the date of put to use overall there is loss. However in light of the above recent judgment of Ahmedabad 1TAT it is at the option of the assessee to select the initial assessment year. Accordingly for the A.Y. 2012-13, there is Net Profit during the year under consideration and there is no brought forward loss or depreciation and hence the Id.AO should be directed to allow ₹ 6,84,59,347 u/s 80IA(4)(iv) of the Act. Working of the same is attached herewith as Annexure 6. 3) Without prejudice to above, vide Circular No. 1/2016 the Central Board of Direct Taxes has clearly stated that It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has raised by the appellant is admitted in view of clear mandate contenting the High Court decision in M/s Arvind Mills Ltd. Following the same, the additional ground for the A.Y.2013-14 is admitted. . 5.5 Having admitted the additional ground, my predecessor CIT (Appeals) examined the facts related to additional claim of deduction u/s 80IA and held that After having carefully considered the facts, the decision in M/s Harsh Engineering and content of Circular No. 1 of 2016,1 have no doubt in my mind that the profits of the eligible units on standalone basis has only to be considered for and from initial assessment year as obtained by the appellant......... After having give a careful consideration to the issue raised by way of additional ground and after perusal of the Authority cited and relied upon by the AR, including jurisdictional High Court in Arvind Mills Ltd (supra) I am not persuaded to grant the relief as claimed by way of additional ground. .......... In my considered opinion, the only procedure prescribed statutorily enabling the appellant to reduce tax paid income as returned, by way of return, of income is to file a revise return as provided u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Aggrieved by the denial of the additional claim which has the effect of reducing the assessed income below the return of income, the assessee knocked the door of Tribunal. 7. The learned AR for the assessee submitted at the outset that the dispute in the present case is not towards eligibility of deduction under s.80IA(4) of the Act. It was submitted that the CIT(A) after examination of facts has readily accepted the claim of deduction to the extent made by the assessee in its return of income. The dispute is towards additional claim of deduction made by the assessee before the CIT(A) which was denied on the grounds of absence of revised return of income in this regard. The learned AR submitted that the assessee earned profit from the windmill project amounting to ₹ 10,40,61,204/- in aggregate during the year. However, while making the claim of deduction at the time of filing return of income, the assessee wrongly applied the provisions of law and judicial interpretation rendered in this regard and thus wrongly adjusted the losses incurred in the windmill project in the past prior to the exercise of option towards 'initial assessment year' envi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the other hand, relied upon the order of the CIT(A). 9. We have carefully considered the rival submissions and perused the orders of the authorities below as well as the case laws cited. The central issue in the present appeal is whether the claim of the assessee towards higher quantification of deduction under s. 80IA(4) of the Act can be entertained on the basis of facts available on record and in the light of judicial precedents and CBDT Circular where the assessee has originally claimed lower amount of deduction by way of return of income under erroneous impression of law. As noticed, the claim made by the assessee in its return of income towards deduction under s.80IA(4) of the Act was duly accepted by the CIT(A) at the first appellate stage. The CIT(A) refused his indulgence towards the additional claim arose on account of reworking of deduction in the light of prevailing judicial precedents and CBDT Circular No.1 of 2016 dated 15.02.2016 on the ground that the assessee has failed to file the revised return and consequently the additional relief cannot be entertained as it would have the effect of bringing the assessed income below the returned income. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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